No matter what age a child is, it is always a good idea to educate them about their finances. The choices and habits they create now can help form how they manage financial independence as young adults!
When it comes to financial independence, it’s not just about money management skills, it’s about fostering a positive mindset towards money. We can do this through goal setting! Young minds learn best when it’s hands on. By practicing managing their money, your child will feel in control. With positive goal setting and creating a plan to initiate those goals, your child will gain valuable experience with long term financial success.
You can do this by Treasure Mapping with your child!
Often in adolescence, when we received birthday money, it’s spent on the latest shoes or a video game we really wanted, without a thought about the future. Reaching monetary goals takes intentionality with money overtime. By creating a plan with your child, they will learn how to view a goal as a process, not a destination. With our Treasure Mapping Activity, you and your child can map out a goal, seeing the steps to accomplish it.
Step 1: Create a financial goal.
Choose a dollar amount that you want to save up to. Enter that dollar amount by the X or “treasure” at the end of the map.
Step 2: Create checkmarks
Often, we fixate on the DESTINATION of the goal instead of the habits we created to make our goal a reality. We can teach this in incremental steps to reaching monetary goals. If your child is trying to reach a goal, our map has 10 check marks they pass on their way to the X. For instance, this could be a $100 goal broken up into ten $10 checkmarks. This will make the goal feel more achievable and give your child a sense of progress as they reach each step. Praising your child throughout this process will teach them the power of their habits, not the longing for the destination. Enter these mini checkmarks in boxes 1-9. Make sure they equal the amount at the very end.
Step 3: Discuss Challenges
Addressing challenges before they arise is a step that is often forgotten about, but one of the most important. Your child may want to spend their money earlier than finishing the map or want to buy a toy instead. Explain to them that every financial decision has a trade-off and opportunity cost. Once they understand the meaning of delayed gratification, they will understand that achieving goals will take patience!
Step 4: Don’t stop at X!
Reaching a goal is an amazing feeling, and something you can continue with your child throughout their adolescence. Assess and adjust based on what worked and what didn’t to make future goals more successful. Your child might grow out of the map, but hopefully they won’t stop at the X!
Financial literacy is something children can implement in every stage of their life. Creating positive habits with a positive mindset turns money into a resource they can use to set themselves up for success!
Here at First Western, we want to help you create generational success. Call us today to learn more!
Sources:
Treasure-Mapping-to-Achieve-Your-Goal_021122_ad_MS.pdf (betweensessions.com)
Treasure Mapping - Visualizing and Achieving Your Goals (mindtools.com)
Personal Finance Tips for Young Children | American Bankers Association (aba.com)
How to Talk to Your Kids About Money | American Bankers Association (aba.com)
Financial Responsibility Infographic | American Bankers Association (aba.com)
How to Talk to Your Kids About Money | American Bankers Association (aba.com)
Top 10 Personal Finance Tips for College Students | American Bankers Association (aba.com)
How to Set Up Your Young Adult for Financial Independence | American Bankers Association (aba.com)